Origin Energy
has raised €800 million ($1.16 billion) of debt funding in the European bond markets through an eight-year notes issue.

The proceeds of the notes will be used to repay part of the $7.4 billion loan facility that Origin secured through a syndicate of banks in August, that had been earmarked for refinancing in the capital markets.

The bonds, rated BBB by Standard & Poor’s, paid a coupon of 3.5 per cent, or 175 basis points over the mid-swap rate.

The pricing equates to around 263 basis points over the Australian swap rate that National Australia Bank credit analysts said offered value relative to existing bonds and other similarly rated debt.

The $7.4 billion loan was Origin’s­­ largest-ever debt raising and formed part of the financing for its $23 billion Australia Pacific Liquefied Natural Gas Project.

ANZ Banking Group, Bank of America Merrill Lynch, JPMorgan, UBS and Goldman Sachs were the underwriters of the loan facility. Origin’s loan underwriters with the exception of ANZ Banking Group were assigned “lead manager" roles on the European bond issue.

Bloomberg reported that Origin had paid 170 basis points over the bank rate for the five-year portion of the syndicated loan and 155 basis points on the four-year portion.

The bond raising is Origin Energy’s third foray into the European debt markets after it raised €750 million and €150 million of seven and ten-year bonds in April. In total Australian non-financial companies including Telstra, Amcor, BHP Billiton and Westfield Retail Trust have raised the equivalent of $7 billion bond financing in the European capital markets, according to Thomson Reuters data. The transaction rounded off a big week in the debt capital markets for Australian listed firms.

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BHP Billiton
, which is rated A+ by Standard & Poor’s raised $US5 billion through the sale of three, five, 10 and 30-year notes. Barclays, Goldman Sachs and JPMorgan managed the miner’s first US bond sale since February 2012.

Global investment grade bond issuance for 2013 reached a record $US1.28 trillion, according to Dealogic data, as more companies seek low cost funding outside of the banking sector.

Rising bond rates however led to a slow down of global investment grade bond issuance in the third quarter, a 21 per cent fall from 2012 levels to $US354 billion.

The period did include the largest ever corporate bond issue – a $US49 billion raising by Verizon Wireless. Apple’s $US17 billion bond issue in April was previously the largest-ever bond issue.